The “Shadow Inventory” are those properties that are in some stage of Foreclosure.
- It might be properties that are being re-viewed for the “foreclosure chopping block”
- It could be those that have completed the foreclosure process.
- Foreclosures which are in some stage of eviction.
- Finally, they could be referencing the properties that are in Short Sale or the Loan Modification Stage.
- Properties that have completed the foreclosure process and are being “strategically” held so the market is not Saturated and further harmed by a mass release of distressed real estate.
“For example, California has nearly 270,000 homes in its shadow inventory. “It’s absolutely an impediment,” Dustin Hobbs, a spokesman for the California Mortgage Bankers Association, told the USA Today. “It’s hanging over the market.”
From an economic view, those numbers that were spoken of as “shadow inventory” are staggering.
Within a Healthy Real estate market, the typical numbers of homes that are within the Foreclosure Inventory are about 1% of the total properties for sale.
We passed that number with the fall of the Sub Prime bank back in 2007. 40-60% of the Real Estate for sale are of the Foreclosure and Distressed variety which populate the market today in the Santa Clarita Valley.
Of those homes, some are not on the market for sale. Some are being lived in by Tenants. Some are owner occupied. Some are vacant caught in the “visible” shadow inventory.
We want to give those of you some “sense” of the real estate market and know where you stand as Residents, buyers and sellers. It is important to get the 20/20 on all Markets so you can base your decisions on fact not conjecture.
Please R/T if you have found this valuable.